A selection of weekly articles by top Bahamian commentators.

August 05, 2014

Leslie Miller and the Future of Electricity in the Bahamas—A Contradiction in Terms

by Larry Smith

I had hoped to avoid talking about Bahamas Electricity Corporation Chairman Leslie Miller again, but last week he went on the public airwaves (as they say) to spout so much nonsense I was unable to resist. In fact, after listening to Miller, I concluded that we are fortunate BEC is able to produce any power at all.

Miller was a guest on Jeff Lloyd’s afternoon chat show last week. He began with the tired complaint that the Guardian media group was unfairly “lambasting” him because its owners hated the PLP and loved Hubert Ingraham. You know, the usual defensive tribal stuff for popular consumption. Then he got down to brass tacks.

“No-one in this country has paid off their light bill, either corporate or personal. That’s 90 per cent of us,” Miller said. "I owe BEC like everybody else. My home bill is pretty much up to date, like everybody else. The average person owes BEC over $5,000 - I don’t owe them over $5,000 - that’s just the way it is. Everybody should pay - including Leslie Miller."

There’s no point analysing this corkscrew logic, but let me paraphrase it. He is simply asserting that almost no-one in the country pays their electricity bills - and he is no different from the rest of us.

The reason for this sad state of affairs, Miller says, is because “43 per cent of the Bahamian population lives below the poverty line.” Actually, the poverty rate among Bahamians is about 11 per cent, according to the government’s own 2013 survey, which translates to about 43,000 people (when Haitians and other nationalities are included).

It is also worth pointing out that it would take two years of non-payment for an average residential consumer’s bill of about $200 per month to rise to over $5,000. And one has to point out that a bill which goes unpaid for years without consequence doesn't really exist.

According to Miller, BEC has a total of $187 million in receivables - $30 million owed by government agencies, $15 million by major hotels, an unidentified amount by protected customers (who include serving politicians and cronies), and the rest by ordinary businesses and households.

“That’s the way any small country operates,” Miller told Jeff Lloyd.

But his suggestions about non-payers are suspect. For example, BEC has about 80,000 residential customers. If the average sum they owe is $5,000, then the corporation's receivables from these customers alone would be $400 million.

Miller went on to say that BEC has now maxed out its $120 million credit line to pay for fuel imports, so customers who are paying on the never-never should consider contributing a little something in order to keep the generators turning.

To spell it out. You have a politician running BEC (and no serving politician should run a public corporation for obvious reasons). That politician advertises that he does not pay his own bills to BEC. He then makes conflicting statements about other delinquents - you should pay because BEC is bankrupt, but you can't pay because tings tough and I am here to help you.

This logic from the executive chairman of BEC goes round in circles, and cannot be squared.

The conversation between Lloyd and Miller then turned to the government’s secrecy-shrouded project to recruit private sector partners to invest in a restructured BEC. This project is already half a year behind schedule and senior government spokesmen have conceded publicly that it may never happen.

Although he has previously ranted against any form of privatisation, last week Miller said “BEC needs to be privatised and run better. Privatisation will make a massive difference because everybody will have to be responsible and do what they supposed to do.” This was a clear admission that the corporation which he runs is currently irresponsible.

But he also admitted he knew nothing about the privatisation process other than what he reads in the papers: “The BEC board has had no input. It is being run strictly by the Office of the Prime Minister. I don’t know what the government wants to do…but consultant reports have indicated that privatisation would result in a 40 per cent reduction in staff at the corporation.”

There is a big disconnect here.The Christie administration foisted this man on us - proudly placing him in one of the country’s most critical technocratic roles - yet doesn't consider him worthy of being included in any discussion of the future of the corporation which he is running. That process is being driven by the octogenarian mandarin, Baltron Bethel, but Miller seems to be going along with the programme anyway.

“BEC is so important that it cannot remain like this,” he told Lloyd. “Some move has to take place to get it beyond where it is. We need a public-private situation with BEC. A private entity should be given the ability to make decisions devoid of any major input from government, and let them run it as a private entity.”

He then focused attention on BEC’s government-guaranteed debt of $450 million: “A private entity has to take that off the backs of the Bahamian people and build a new power plant for $200 million. That’s what is needed. We got couple groups with the ability to do it easily. And the banks know that with proper management and the necessary changes BEC could be turned around in three to five years.”

In this comment, Miller is blaming the current condition of BEC on its management and staff - and as executive chairman he is the manager in chief.

Of course, any discussion of the future of BEC brings up the issue that has consternated political observers for the past few weeks - Parliamentary Secretary Renward Wells and the famous Letter of Intent. It was no different on the Jeff Lloyd show, but first here’s a brief synopsis of the situation:

1. A cabinet-approved contract is given to a company (with no public tender and principals and contract secret) for the use of municipal waste at the New Providence landfill.

2. A letter of intent is then signed by a junior politician with the financier of another company (with no public tender and principals and contract secret) for use of the same municipal waste for another purpose that is apparently not cabinet-approved.

3. There ensues a dance of words between the deputy prime minister (responsible for energy), the environment minister (responsible for the dump), the prime minister (in charge of everything) and the parliamentary secretary (a lowly flunky).

4. Reports have it that the PM (or some other senior official) instructed Wells to sign the letter. The PM is then said to have asked Wells to resign because he signed it. But Wells says he is not resigning.

5. Insider reports say the whole affair has to do with the leadership rivalry between the PM and the DPM.

Are you following me? Well, here’s what Miller had to say about all that:

"I am not sure that the PM confirmed he asked Wells to resign. People are making a big deal out of something insignificant. I support Wells. He has a contribution to make and should not be cut down for something that is no big deal. He might have signed it out of ignorance or to be helpful to fellas who he knows are friendly with other people."

There are also reports that Miller himself has been asked to resign as chairman of BEC. Here is what he had to say about that:

“I met with my minister today and I got no notice of the BEC board being terminated. I was not asked to resign and I do not intend to resign because I have no reason to do so. But the PM has a right to make any determination he wants.”

In other words, I ain’t going nowhere and you could do what you want.

What about Miller’s explanation for the recent power outages on New Providence? Surely, he would be more cogent on this matter.

“We have capacity of 340 megawatts,” he told Lloyd. "What we need is 20-30% spinning reserve. We only have capacity to do 240 megawatts in terms of running the engines, and if one goes out during the night we in trouble.

“We need a new 128 megawatt power plant that would cost $200 million, but BEC's total debt is $450 million, which is 5.6% of our gross domestic product. We in a perilous problem, that’s why the rating agencies are pushing government to sort out BEC because it plays such pivotal role in our economy.”

Unfortunately, this explanation makes as much sense as his previous comments. Spinning reserve refers to back-up generating capacity to maintain grid stability during emergencies. Bearing that in mind, here’s a breakdown of what I think he is saying:

1. We have capacity of 340 MW.

2. But we only can only do 240 MW.

3. We need 20-30% spinning reserve, which is 68-102 MW.

4. We need a new plant to produce 128 MW.

Meanwhile, Miller reiterated his oft-repeated claim that within a short time he could bring electricity prices down by 20 per cent, and that by building a regasification plant for LNG imports, prices could be cut another 20 per cent within five years. “But these things take money,” he added wisely. “We don’t have that kind of money”

This brings us back to the beginning. And we would like to close with this gem from Miller: "it can’t be good for one set of people and the rest of us suffering and catching hell.”

Comments

Well written Larry. It sounds like a joke, but it is not. We always pay our bill on time because we know our power will be cut of if we do not pay. Our gardener knows that his power will be cut off if he doesn't pay so he borrows from us if he has to, and he always repays us in good time. Do other non payers not have their power cut off? This is a minor issue compared with the rest of the MESS.
Do we laugh or cry?

This is such a serious issue that it should be raised weekly until there is some sort of resolution. Leslie Miller obviously is either crazy or being feed conflicting information but I think the former is , more likelyj and certainly cabinet government is a joke. No one discuses anything and particularily any issue that needs a decision. The country appears to be staggering from one crisis to another and it certainly is not the Bahamas I have known over the last 45 years. How can we influence how the country is run? We seem to be in a hopeless situation because if something is not done soon, the Bahamas will be a fourth world country.
We are at the moment sitting in Scotland and waiting for the outcome of the Referendum on Independence - another ghastly story. Wish I had column like yours here.

Well put Larry, That this Man sits anywhere near a position of authority, much less something so critical to the people of the Bahamas is downright ludicrous!
Between his outbursts of obvious chauvinism and ignorance and his admissions of his own behavior with respect of paying his bills I'm starting to think mercury poisoning must be occurring!
Mad as a Hatter.
his outlandish rational of "we're all doing it" perhaps shows the true level of intellect we are dealing with.
Meanwhile, here we sit 40 years behind most first world countries on Solar,
and almost dead last in the Caribbean (33th out of 34 on planned, installed or policy)

Well reported Larry. For an additional chuckle (this would be funny if not so really serious) have a look at BEC's fiasco of a $100 million plus don't think you will truly have power new power plant in Abaco. 4 12 MW generators bought and within a coupla years only two are working. One was burned out and the second scavenge d for parts. We still havin blackouts after all that.